Recap | Week Ahead | Fed Meeting and CPI
“Hawkish Cut” - The European Central Bank delivered its first rate cut since 2019, followed by rhetoric and projections to dissuade markets from expecting any more anytime soon.
Last week's market recap:
- The S&P 500 closed the week up 1.36%. Year-to-date the index is up 12.81%
- NASDAQ closed the week up 2.40%. YTD the index is up 14.51%
- U.S. Aggregate Bond index was up .44%. YTD the index is down -1.21%
- 10-Year Treasury Rate decreased, ending the week at 4.43% down from 4.51% the prior week
- Fed Funds Target rate remains at 5.25-5.50%
- The 1-Year Treasury is yielding 5.18%
- A 6 Month Treasury is yielding 5.37%
The week ahead:
- Fed Meeting
- CPI
- PPI
- Apple’s developers conference
Last week:
- A new stock exchange based in Texas is seeking registration with the U.S. Securities and Exchange Commission.
- Jobs data showed the labor market remains strong, but it’s slowing.
- The ECB decided on a rate cut in Europe.
Rates Cuts:
Global interest rates seem to have peaked and we’re starting to see global central banks begin to ease. Much attention will be on the Federal Reserve meeting this week. The Fed is expected to remain on hold in the coming months even as other central banks start to trim rates. If other central banks continue to cut rates, the Fed may feel pressure to cut to avoid an unwanted rise in the exchange rate. A strong dollar could hurt companies that get a significant share of their revenue from overseas (ie: most of the S&P 500). The Fed is aware of these risks and may not be far behind global central banks with rate cuts.
As always, let us know if you have any questions.
Best,
CRA Investment Committee
Matt Reynolds CPA, CFP®
Tom Reynolds, CPA
Robert T. Martin, CFA, CFP®
Gordon Shearer Jr., CFP®
Jeff Hilliard, CFP®, CRPC®
Joe McCaffrey, CFP®
Phillip Tompkins, CFP®
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